The End Of Pay-For-Delay? FTC Sees An Opportunity In AndroGel Lawsuit
This article was originally published in RPM Report
Reverse payment settlements are a popular tactic for settling patent disputes between brand companies and their generic competitors. The Federal Trade Commission has aggressively (but mostly unsuccessfully) fought “pay-for-delay” deals in the courts, arguing that they drive up drug prices. Now FTC has its best chance yet at convincing the Supreme Court to hear the issue. Is this the end of pay-for-delay?
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The Supreme Court’s majority opinion in Federal Trade Commission v. Actavis makes it easier for FTC and private plaintiffs to challenge reverse payment settlements between branded drug companies and their would-be generic competitors. While the opinion declines to find “pay-for-delay” deals presumptively anticompetitive (a win for industry), it also strips a safe harbor used by the appeals courts (a clear loss).
During Supreme Court oral arguments in the AndroGel pay-for-delay case, the government and drug manufacturers each pushed for a one-size-fits-all antitrust interpretation of brand-generic reverse payment settlements. But the most likely outcome will probably fall somewhere in the middle: allowing the deals to continue, but with additional scrutiny to ensure they are not anticompetitive.
Of the 140 brand-generic patent settlements in FY 2012, 40 contained both compensation to the generic manufacturer and a restriction on generic entry; FTC announces this record number as its suit against Watson goes to Supreme Court.